Just 8% of agricultural businesses granted a patent in 2020-2021[i] went on to claim tax relief on profits via HMRC’s Patent Box scheme[ii], according to the government’s latest statistics, analysed by tax relief specialist Access2Funding, a Ryan company.
Within the agricultural sectors, 292 patents were granted, yet only 25 businesses utilised the government’s Patent Box tax relief scheme to receive a reduction in corporation tax for exploiting these patented inventions or innovations.
The projected figures show that the agriculture, forestry and fishing sectors accounted for 2% of all UK Patent Box claims in 2020-21, with the total claim value sitting at £1 million, and an average claim value of £40,000 per business.
Dawn Coker, managing director at Access2Funding, a Ryan company, comments:
“Businesses will be met with an increased corporation tax rate of 25% from April 2023, so utilising government tax relief for patented innovations is particularly pertinent right now.
“The figures show a 35% increase in the number of agricultural patents granted from 2020-2021, which is encouraging to see – but there is a learning curve for these businesses in how they should also be maximising the value from their IP.
“Advancements in agritech now mean a wide range of developments may be patentable, and the opportunity to commercialise IP should not be missed. The agricultural sectors are vastly underclaiming both Patent Box and R&D tax relief.”
Across the UK, official figures from the IPO show 20,667 patents were granted in 2020 and 2021, yet HMRC’s Patent Box relief statistics for the same period show that just 7% of businesses (1,535) made a claim.
The sectors that made the most Patent Box claims were manufacturing (52% of all claims), followed by wholesale and retail (19%).
The Patent Box scheme was designed by the government to encourage companies to keep and commercialise Intellectual Property (IP) in the UK by protecting new products and processes that result from R&D. As well as the conventional benefits of patent protection, the scheme also allows companies to apply a lower rate of corporation tax to profits earned from patented inventions.
[i] Facts and figures: patents, trade marks, designs and hearings: 2021 – UK GOV.
[ii] Patent Box relief statistics: September 2022 – UK GOV.
